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Wednesday, 7 December 2011

STOCK MARKET UPDATE: 08.12.2011



Stock



Karachi Stocks Down 57.85 Points:
KARACHI, Dec 08: The KSE-100 index was at 11226.04, down 57.85 points. 

December 08, 2011

TOP  5  SCRIPTS GAINERS AND LOOSERS:
Engro Foods
Rs 8.33
Unilever Pakistan
Rs (82.96)
Al-Ghazi Tractor
Rs 5.79
National Refinery
Rs (11.74)
Packages
Rs 3.70
Nestle Pakistan
Rs (10.76)
Dadex Etirnet
Rs 1.81
Tri-Pack Films
Rs (8.83)
OGDC
Rs 1.21
Fauji Fertilizer
Rs (6.95)

KSE 30 – Shares Index
Previous 10,594.82, Wednesday’s 10,444.27 points, minus 150.55 points.
KSE 100 – Shares Index
Previous 11,372.21, Wednesday’s 11,283.89, minus 88.32 points.
MARKET CAPITALIZATION
Previous Rs.2,961.386bn, Wednesday’s 2,937.901bn, minus 23.485bn.
VOLUME LEADERS
J.S.& Co 3.729m, Fauji Fertiliser Bin Qasim 3.252m, Lotte Pakistan 3.201m, SilkBank 2.210m, Fatima Fertiliser 1.944m shares.
TOTAL VOLUME
37.871m shares
TOTAL
TONE:easy,total listed 638,actives 312,inactives 326,plus 62,minus 143,unchanged 107


Karachi Stocks lose 88 points on resignation rumours
KARACHI, Dec 7: The shares market resumed trading on Wednesday on a violent note followed by rumours that President Asif Zardari has resigned on health grounds. The official denial could not convince investors though it did soothe nerves somewhat and halted the free fall.
The benchmark index plunged by 161 points initially to hit the session’s low of 11,211.01 but later support in some of the pivotal sectors allowed it to finish better at 11,283.89, off 88.32 points.
Major fall was contributed by leading fertiliser shares, notably Fauji Fertiliser, Engro Corporation and Fauji Fertiliser Bin Qasim. The
conflicting reports about the supply of gas added to the anxiety.”
The President may not have resigned as suggested by a section of the foreign press, but certain developments, particularly the memo episode and the apex court proceedings and the deteriorating bilateral relations with the US on various counts lend credence to rumours,” some analysts said.
Already under pressure amid falling demand, both from foreign investors and institutions, the market is in search of a safe haven but failed to find one so far despite some genuine efforts by a section of investors to put it back on the rails, some others said.
“And on the top of them is the American Stick and carrot policy,” they said and adding: “investors have limited options to operate according to their free will,” said a leading analyst Ahsan Mehanti.
Another leading analyst Samar Iqbal said negative background news from the political front are taking their toll in the form of price erosion but the chief factor behind the uneven price movements appears to be the weakness of oil and fertiliser sector, one of the market trend setters. He said foreign investors are also a bit shy in the backdrop of stand-off with the US on various issues and a firm stand taken by Pakistan linked with its national pride and sovereignty.
Leading gainers were led by Universal Foods and Al-Ghazi Tractors, up by Rs8.33 and 5.79, while losers were topped by Unilever Pakistan and National Refinery, off by Rs82.96 and 11.74 respectively.
Turnover figure was maintained around previous level of 37.871m shares, but losers held a strong lead over the gainers at 143 to 62, with 107 shares holding on to the last levels.
The active list was topped by JS & Co, lower 19 paisa at Rs5.25 on 4m shares followed by Fauji Fertiliser Bin Qasim, off Rs2.42 at 50.53 on 3m shares, Lotte Pakistan, lower 59 paisa at 8.79 on also 3m shares, Silk Bank, easy by seven paisa at 1.60 on 2.210m shares, Fatima Fertiliser, lower by 36 paisa at 22.44 on 2m shares, Nishat mills, off 50 paisa at 40.63 on 1,804m shares and Engro Corporation, sharply lower by Rs6.09 at 116.93 on 1,593m shares.
They were followed by Fauji Fertiliser, off Rs6.95 at 151.78 on 1.588m shares Arif Habib Corporation, lower 57 paisa at 27.70 on 1.564m shares and National Bank, easy by 30 paisa at 40.07 on 1.363m shares.
FUTURE CONTRACTS: The active list was led by Fauji Fertiliser Bin Qasim, off Rs2.39 at 48.02 on 1.244m shares followed by Engro Corporation, Rs6.17 at 117.90 on 0.868m shares and National Bank, lower by 34 paisa at 40.33 on 0.647m shares.
They were followed by Attock Refinery, off Rs4.97 at 111.62 on 0.591m shares and Fauji Fertiliser, sharply lower by Rs7.08 at 153.01 on 0.589m shares.

SECP, KSE initiate reconciliatory talks
KARACHI, Dec 7: Chairman, Securities and Exchange Commission of Pakistan, Mohammad Ali, along with his team visited the Karachi Stock Exchange on Wednesday and held a hastily summoned informal meeting of members.
Stock brokers already incensed by a steep decline in both the value and volume of shares had drawn daggers last week, when they issued press release “rejecting the brokers’ regulation regime ‘concept paper’ of the SECP. The Wednesday’s meeting was attended by the KSE Board; the bourse management and about a half of the 200-strong broker fraternity, who voiced their
feelings, which as a broker said was none in too good cheer.

A joint press release issued by the SECP and the KSE in the evening stressed upon ‘consultative process and coordinated approach in future’.
But before drawing upon the contents of the joint statement, it has to be reminded that an extra-ordinary general meeting of the KSE brokers is scheduled to be held on Thursday, where the apex regulator’s proposal to extend the term of office of board of directors of the bourses from currently prevailing one to two years would be put up for approval; the brokers’ had declined an earlier suggestion to raise the period from one to three years. Also according to a member, a meeting of the regulators is
likely to be held with the Federal Board of Revenue (FBR) on Thursday over the Capital Gains Tax (CGT).

“The team would try to present the case of low collection under the new regime due to investors’ nervousness over the collection method,” he said.
Brokers have been clamouring to convince the taxation authorities that the best way to collect the gain tax on shares trading was to collect it under presumptive tax regime, which they believe, would enhance the revenues of the government as well as help in improving the working of tax department and building up overall confidence of investors.
The SECP-KSE joint press release issued on Wednesday stated that the regulators-members meeting discussed various important market related matters, including the proposed new broker registration regime.
The SECP briefed the participants on the various significant steps taken by it to ensure sustainability and boost confidence of the market participants.
“It was emphasised that all reform measures that have been introduced in the past and currently being considered were in close coordination and consultation with the relevant stakeholders and are designed to improve trading volumes and enhancing retail participation in the stock market,” the statement said.
It observed that the participants were briefed on the SECP’s strategic objectives for the coming years. The key objectives highlighted include: (i) Structural and regulatory reforms for the market; (ii) Measures for investor education/awareness, restoration of investor confidence and expansion of market outreach; (iii) Development of equity market in particular the derivative market, (iv) Development of debt market, (v) Development of commodity and currency markets; (vi) Strengthening the capital market intermediaries for efficient operations and improved regulation; (vii) Improving governance, risk management, efficiency and transparency in the market operations (viii) Development of Islamic Products and Shariah-compliant investment alternatives; and (ix) Image-building of the market.
The joint release stated: “While discussing the concept paper on proposed new ‘Broker Registration Regime’, the SECP reiterated that the proposed regime would help in strengthening the market by allowing only fit and proper brokers to operate in the market. It would provide a framework where only qualified, experienced, sustainable, technically and financially strong market participants would operate as brokers.
“All these measures will help in better protection of the interests of the investors and would lead our market another step closer to acceptable best international standards,” the release said.
It was also clarified that the concept paper was sent to the exchanges for soliciting comments and that the regime would be finalised after giving due consideration to the concerns and feedback of the stakeholders. In addition, other proposals such as, corporatization of exchanges, streamlining the account opening process and corporate governance issues, including matters related with the Clearing House protection fund, were also discussed.
The SECP assured that all proposals were under the review process and the future course of action would be taken in the light of legal provisions with the aim to provide appropriate facilitation and support to the market.
“The regulators agreed to continue the consultative process and coordinated approach in future also to ensure implementation of various market reform measures,” the joint press release concluded.
Mohammed Saleem Mansoori

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